ABU DHABI: Egypt, one of the world's largest wheat importers, is studying changes to its wheat import specifications, including potentially relaxing a tough moisture content rule that has locked out French grain since its introduction in January.
Egypt exerts a strong influence over the global wheat market with its imports of 10 million tonnes per year, split more or less equally between Egypt's main state-buyer, the General Authority of Supply Commodities (GASC) and private importers.
France is one of Egypt's most important suppliers of wheat, and has struggled to meet the more stringent moisture limits. The inclusion of French wheat would make tenders more competitive and help lower costs for Egypt as its currency reserves dwindle.
In January GASC ended its tolerance for a moisture content of up to 13.5 percent. The average moisture content in the 2013 French wheat harvest was 13.5 percent.
Mamdouh Abdel Fattah, vice chairman of GASC, said on Wednesday that all conditions would be reviewed, including the option of a wheat moisture limit of 13 percent.
"The main aim is to make the process of importing wheat easier," Abdel Fattah told Reuters over the telephone.
Although the Supply Ministry, which oversees GASC, has said before it would revise the tough import standards, Minister Khaled Hanafi's remarks in April indicated the moisture content would remain the same. He advised French sellers to dry their wheat in order to make it fit the standards.
GASC's comments on Wednesday seemed to indicate a change is possible in the near future to accommodate purchases of the 2014 French crop.
"This is news for French wheat, which could become more price competitive compared to currently when you're looking at having to pay to dry wheat," one European trader said.
French export traders had said the market did not expect Egypt to make concessions on the issue for the 2013 season as its annual import campaign was drawing to an end, but GASC could consider concessions for the coming season if its supply options were limited.
Traders and bankers have said that Egypt's dwindling foreign currency reserves have caused a slowing down in payment procedures for food bought by state entities.
"The moisture change cost French exporters millions and millions of dollars in lost business and also could have meant that Egypt paid more for its imports," another European trader said.
"With belief that Egypt is again struggling to pay for its commodity imports, I think the priority on the Egyptian side could be a change to ensure imports at the lowest price," he said.
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